Aside from the humor, Icahn revealed what prompted him to amass a huge position in nutrition supplement-seller Herbalife. It wasn't just because he dislikes rival fund manager Bill Ackman, he said.

Ackman, who runs $12 billion Pershing Square, publicly revealed in December that his fund is shorting a billion dollars worth of Herbalife with a price target of $0. Ackman believes the company is a "pyramid scheme" and that regulators, specifically the Federal Trade Commission, will be induced to investigate it.

Upon learning of Ackman's position in Herbalife and reading the well-publicized 342-slide presentation, Icahn said it made "no sense." What he was also curious about though was Ackman's lawyer.

"I'm good at reading those reports real quick over the years. And I said it makes no sense. Then it occurred to me, to wonder who the lawyer is who's advising him, and he's on the stage pontificating, this Ackman. And if I do a little homework on this, a little homework, this is where things are simplistic, and on my Twitter account, I'm going to show people some of these no-brainers." Icahn said at Delivering Alpha.

At the Harbor Investment Conference in February Ackman said that Pershing Square had the assistance of "some of the top law firms" and they've also concluded that it's a pyramid scheme. One of those firms he mentioned was top corporate law firm Sullivan & Cromwell.

Icahn said he Googled Sullivan & Cromwell. As Icahn explained to the audience, with the FTC there are two divisions — consumer protection and antitrust.

Sullivan & Cromwell, he said, has experience in antitrust and hardly any in consumer protection. It's Icahn's contention that Herbalife would fall under consumer protection.

"Now, look at the simple ticket. So I go look at this report, read it for two hours, and I said this sounds like bull, but I can't tell, you know, I don't know. So I look up his lawyer, and the FTC has a department, the division of antitrust and division of consumer protection. So I look at that. I look at that, they got nobody — hardly anybody in the consumer protection division. The lawyers are all antitrust. So his lawyer wasn't an expert on this stuff. No experts. So I don't know much about the FTC, but they got a business that has 35,000 people working for it, it's been making all this money and it's been really — nothing really ever proven about it. You are going to close a firm like that down?"

Icahn is correct in this respect. Antitrust is one of Sullivan & Cromwell's sweet spots. If you remember, Sullivan & Cromwell was involved in huge antitrust suits such as Polaroid Corporation v. Eastman Kodak Company and Novell's case against Microsoft.

After doing some research on the Internet, Icahn subsequently sent Pershing Square's Herbalife report to a consumer protection "expert" attorney.

"So I called an expert lawyer, a top law firm that just does this. I said, listen, obviously, I want you to read this, three or four hours, please read it for me. I get a guy on the phone, 35 years just dealing with FTC in consumer protection. He read it. He calls me back and he's laughing. He says this is a pile of — but I'm on TV, so I won't say it — euphemistically a pile of absurdity. He says this is complete nonsense what they wrote here. I can't believe anybody seriously is writing that the FTC would want to close it. Therefore, I got very interested in it. I bought a lot of the stock when it went down and, you noticed, Sullivan & Cromwell never wrote an opinion that this company has any problems," Icahn said.

As a result, Icahn concluded that this was a tremendous oversight by Ackman's Pershing Square that would allow Icahn to kill two birds with one stone: the first being on the winning side of the "mother of all short squeezes," and the second to deal a catastrophic blow to his arch-nemesis.

"And you know, Ackman, I would just say to you what I said to you before, that the thing that is amazing to me, and at the very least, you could say euphemistically is not judicious, is short 20 million shares of anything and go talk about it. ... First of all, it's stupid to take that much of a short position anyway, but if you do, the dumbest thing, in my mind, that you could do is get a room full of people and tell them that you're short. That tells you how smart he is. And tell you, oh, look how smart I am, and the stock's going to go down."

"I think the guy honestly believed that people were going to follow him. And, you know, he's not the best man on Wall Street. I'm not the only guy — I like him now, so I'm not going to say anything bad about him."